Mental Health is an issue of great importance to states and governments worldwide. Mental illness is the number one cause of disabilities in Canada and globally. Psychiatry dominates mental health knowledge, discourses and policy, prioritizing a biomedical approach, producing questionable results. The concept of psychiatric disorders is criticized for lacking scientific reliability and validity, psychopharmaceuticals for inefficacy and danger, and coercive practices for violating human rights. Why then does psychiatry continue to dominate mental health policy, practices, discourses and understandings? Applying critical theory of political economy with influences from Marx, Foucault, and others, this thesis argues psychiatry's power and privilege persists through the existence of the state/psychiatry apparatus, consolidating knowledge and power in a process of psychiatric subjectification, creating psychiatric subjects - mentally ill persons. The theory is applied to Canada and Ontario, mapping and explaining the parameters and layers of the apparatus and the political economy of psychiatry.